GNS Science confirmed the eruption, at the Te Maari crater, happened shortly after 1.20pm. It is the second eruption on the mountain this year; an eruption on August 6 was the first on Tongariro for more than 100 years.

Up to 90 Napier schoolchildren were on the mountain, two hours into a tramp on the Tongariro track, but are safe and well.

Tamatea Intermediate teacher Lomi Schaumkel said the group - which also included six parents and four teachers - was near the Katetahi hot springs when they saw the beginnings of the eruption.

''We were right up there next to it. It was just amazing. We were probably only a kilometre away from it. We were right next to one of the signs saying we were out of the danger zone.

''We saw all these tourists running away from it. We didn't stick around long,'' he said.

A further 20 Year 8 pupils from Gulf Harbour School in Whangaparoa were making their way off the track with parents and guides after being just 750m from where the crater erupted.

Two bus drivers from Nimon and Sons, who took the Napier children to the mountain, had reported back to their base that they could see an ash plume 2km high, a spokesman said.

Conservation Department (DOC) area manager Jonathan Maxwell said 30 to 50 people were being evacuated from the Tongariro Crossing track. No injuries had been reported. State highways in the area had been closed.

Today's eruption lasted for about five minutes. GNS has updated the alert on Tongariro to level 2, meaning there is "minor eruptive activity". The aviation colour code has been lifted to red, meaning there is "significant emission of ash'' into the atmosphere.

Air New Zealand flights between Taupo and Wellington have been cancelled because of the volcanic activity.

An airline spokesman said the company was working with the Civil Aviation Authority and the MetService to monitor the ash cloud.

Passengers were being advised to check the Air New Zealand website for flight arrivals and departure information which would be constantly updated throughout the day.

A national advisory has been issued by Civil Defence saying regions from Waikato down to Hawke's Bay could be affected by ash cloud.

"Minor volcanic activity is occurring at Tongariro - Te Maari craters and could be hazardous in the immediate vicinity of the craters.

"Light volcanic ash fall can be anticipated downwind of Tongariro and may impact the following areas or regions: Waikato; Hawkes Bay; Gisborne and Bay of Plenty."

Genesis Energy was shutting production at its Tongariro hydro scheme site south of Lake Taupo.

Tongariro/Rangipo Prison - which is located near the base of Mt Tongariro, off the Desert Road - was operating as normal at this stage.

Corrections Department central regional manager Terry Buffery said there was no local site impact following the eruption.

''However, robust plans are in place to manage the facility should the situation escalate. Safety is always a priority for staff, prisoners and the public. We are confident in our ability to respond accordingly.''

STAY INDOORS

Civil Defence has warned people to stay indoors if ash is present.

"Volcanic ash could be a health hazard, especially if you suffer from breathing difficulty. If outside, seek shelter (e.g. in a car or building)."

It was advising people to close all windows and cover their mouths if caught in the ash. People should stay out of designated restricted zones.

DOC had a helicopter in the air and was canvassing the volcano to see if they could locate anyone on the mountain, a Taupo Council spokeswoman said.

"There is a helicopter looking to see if there's anyone around, any visitors on the mountain to make sure everybody is safe," she said.

Taupo Council's civil defence emergency manager Phil Parker, who coordinated the response last time the volcano erupted, was working with DOC and other organisations.

RESIDENTS ALARMED

Lake Rotoaira resident Robyn Bennett said there was a big, black ash cloud over her house, which was about a kilometre from the eruption site.

"It's just blew her stack," she said.

She said the air smelled of sulphur.

"It's hard to breathe if you go outside, it's pushing out quite heavily." Bennett said she didn't hear the eruption but it looked like a new vent had formed in front of a previous eruption crater. The ash cloud was moving east towards Napier and Taupo.

Ann Lambert, owner of the Rainbow Motel at Tokaanu, near Turangi, said she had not heard any noise, unlike the previous time Tongariro erupted when there had been a "huge loud noise".

"We weren't aware it had happened. We just looked up and saw it," she said.

"It's just a grey cloud at the moment ... It's not as imposing as the last time."

Kathleen Konui, who lives at Otukou Marae "just below" the mountain, said she had heard a sound like a shotgun going off.

"The mountain was all covered with white smoke," she said.

In the hour or so since then the air had cleared, although she could still see some smoke coming from about four holes on the mountain.

"I'm standing here now looking at them."

The sky was too hazy for her to be able to see a plume from the eruption.

At 1.30am this morning a New Zealand Couriers truck driver reported a strong smell of sulphur on the Desert Road while Motuoapoa resident Cindy Greaney said she noticed an "obvious smell of sulphur" at 6am.

HISTORY REPEATS

This is the second eruption this year. The Te Maari crater erupted on August 6, the first time in more than 100 years.

The eruption, on August 6, widened and deepened the crater and reactivated vents which had been covered up in the 116 years since it last erupted in 1896.

Ruapehu has also been active recently but has not erupted. Pressure was building under the volcano and there was an increased likelihood of an eruption, GNS said last week.

The volcanoes are close to each other but scientists did not believe that the activity at both volcanoes was related.

However, they couldn't exclude the possibility, GNS vulcanologist Nico Fournier said earlier this week.

"We don't have evidence at the moment that the activity of the two volcanoes are related," Fournier said. "But we can't exclude it entirely."

GNS vulcanologists were researching if activity at the two volcanoes was connected and also were looking at the relationship between earthquakes and volcanic activity.

A series of earthquakes rattled the ground beneath Tongariro in the weeks leading up to the August eruption and another series of quakes have shaken the ground beneath Ruapehu in the last few weeks.